The present invention is related to on-line advertising. It especially pertains to techniques and mechanisms for pricing on-line advertisement inventory.
For many web portals and Internet Service Providers (ISPs), advertising is a major source of revenue. One form of advertising involves showing advertisers' advertisement banners on web sites that are being visited by users. For example, a preeminent portal such as Yahoo! displays advertisers' advertisements on one or more associated web sites that are viewed by users. In return, the advertisers pay a fee for each advertisement or a predefined number of advertisements viewed by web users. Contracts to show advertisements are normally signed several weeks or months before advertisements get delivered and are often expressed in terms of page views. The duration of contracts typically ranges from one day to multiple years.
A significant portion of advertising contracts is in the form of guaranteed delivery bookings. A guaranteed booking specifies an agreement between the advertisement seller or portal and an advertiser. For example, a guaranteed booking specifies the price and the quantity of inventory, as well as the user target profile, to be delivered under the contract in advance of the advertisement being delivered or displayed.
In order to improve the efficiency of the marketplace, a pricing mechanism that reflects the true underlying value of the inventory delivered is needed. If a particular inventory is overpriced, the advertisers may become dissatisfied. Conversely, if a particular inventory is under-priced, revenue opportunities would be lost. Accordingly, it would be beneficial to provide appropriate pricing of such on-line advertising inventory.